According to the president of the Central Bank, Roberto Campos Neto, online betting and gaming platforms are beginning to raise suspicions of a possible deterioration in credit quality, with significant income commitment. He also mentioned that there has been an increase of over 200% since January in the amount that players transfer to these companies via Pix.
According to the report in O Globo, there would still be a considerable number of low-income people, who are also beneficiaries of the Bolsa Família program, betting.
“It is generating a perception that we might have a worsening in credit quality with significant commitment […] We have tried to help the government and Congress with the data we have and the growth is very large. The correlation between people who receive Bolsa Família, low-income people, and the increase in betting has been quite significant“, he stated.
“We can map what has been transferred via Pix to these platforms and the growth from January to now has been quite significant. We look at the average ticket and it has risen more than 200%. It is something that draws attention and we begin to perceive that there will be an effect on delinquency at the end”, commented the director when saying that the credit data came stronger than the monetary authority's expectations.
At a conference organized by Banco Safra in São Paulo this morning, Campos Neto also mentioned that inflation remains a concern in the country, especially with economic growth above expectations and a heated job market.
The Bank is still studying the impact of historically low unemployment on inflation, but there are signs that this factor is beginning to weigh.
“The Central Bank is very uncomfortable with what happens with inflation expectations. The long ones still well above our target.
He commented that the labor market data have fueled debates about the equilibrium unemployment rate, an index that the market has misjudged several times. Moreover, according to Campos Neto, Brazil's growth is coming slightly above potential, at the margin.
The president said that a slowdown in spending is expected, to some extent influenced by the fiscal framework.
There has been, recently, an increase in risk premiums, but Campos Neto argues that this would be related to concerns about transparency in the data, and not to growth in expenses.
“We need to use as input, as data from our models, to understand this process of inflation convergence. The framework itself forces a reduction, how much we do not risk putting, but we understand that there will indeed be a slowdown in spending”, he said.
“More recently this risk premium has arisen, but not coming from the trajectory and number of expenses, but from transparency in relation to the numbers (fiscal)”, he concluded.
Source: GMB
